At 5'4", a Trek 15" 7series frame should in fact work fine, unless you have VERY long legs relative to your overall height. You might need a 17.5, but that's what I would ride in that bike (5'9" w/33" cycling inseam). I suspect the bike is supplied with a fairly short/standard seatpost; you certainly can fit a longer one and indeed I would try that first and see if you then like the overall fit (i.e. see if both the reach to the bars and saddle-to-bar drop are right, once you've got proper leg extension). The post 'min insertion' mark is there primarily to ensure that enough post remains in the frame to extend below the top tube/seat tube junction (to prevent excessive stress on the frame), and secondarily to ensure the post itself doesn't snap -- but with a good post you can run up to 9 or 10 inches out of the frame if required, so long as enough remains IN the frame. Good luck!